Our Terms & Conditions | Our Privacy Policy
Hyundai Motor India is likely to report its third consecutive quarter of year-on-year decline in earnings when the company announces its fourth-quarter results on Friday. Lower vehicle dispatches amid heightened competition in the domestic market, along with increased discounts, are expected to hit the automaker’s profitability during the period.
Estimates from three domestic brokerages indicate that the company’s net profit for the January–March quarter could be in the range of ₹1,220.9 crore to ₹1,431.4 crore, representing a 14–27% drop from ₹1,677.2 crore in the year-ago quarter and ₹1,160.7 crore in the third quarter of the same financial year.
The anticipated year-on-year decline for the quarter is expected not just in net profit but also in revenue, EBITDA, and margins. Revenue guidance from Motilal Oswal, Kotak Institutional Equities, and Philip Capital for the quarter is in the range of ₹17,218 crore to ₹17,467.2 crore, down 1.2–2.6% from ₹17,671.1 crore in the same period last year.
This decline is largely attributed to the company’s lower vehicle dispatches and higher discounts during the quarter. In the January–March period, Hyundai dispatched a total of 1.92 lakh vehicles, down 1.1% from 1.94 lakh vehicles in the year-ago period. While vehicle exports rose by 14% during the period, they were not sufficient to offset a 4% decline in domestic dispatches.
Hyundai has been facing stiff competition from Mahindra & Mahindra and Tata Motors. The Korean automaker, which has long held the position of the second-largest car seller in the country, slipped to fourth place in retail sales in both February and March, ceding ground to Tata Motors and Mahindra & Mahindra.
“We expect revenues to decline by 1% on a YoY basis, led by (1) a 1% YoY decline in volumes and (2) higher discounts, which will be offset by a 1% YoY increase in vehicle ASPs, led by a richer product mix (higher mix of SUVs) in 4QFY25,” Kotak Institutional Equities said in its report.
Meanwhile, operating profit margin, or EBITDA margin, is projected in the range of 11.5–12.7%, down from 14.3% in the year-ago period, according to estimates. “We expect EBITDA margin to decline by 160 bps on a YoY basis to 12.7% in 4QFY25, mainly due to (1) higher discounts and (2) a weaker geography mix in export markets,” Kotak added.
Sequentially, the fourth-quarter earnings will reflect an improvement, primarily due to higher volumes compared to the October–December quarter.
With 1.92 lakh units, total volumes were up 3% compared to the previous quarter. This growth was largely attributable to a 5% expansion in domestic volumes. However, this gain was somewhat offset by a 6% decrease in export volumes during the same quarter.
“EBITDA margin is expected at 11.5% in Q4FY25, improving by 20 bps QoQ due to the expectation of no one-offs, excluding e-Creta launch expenses on the cards. QoQ discounting was broadly the same. Some benefits of the price increase and scale advantage could emerge, but these will likely be offset by a lower export contribution QoQ,” Philip Capital said in a report.
Hyundai India’s shares closed at ₹1,836 on the NSE on Thursday. The company is expected to announce its results during market hours on Friday. Investors will be closely monitoring management’s commentary on its strategy to counter competitors such as Tata Motors and M&M, as well as insights into upcoming electric vehicle plans.
India’s largest carmaker, Maruti Suzuki, saw its net profit decline by 4.3% year-on-year to ₹3,711 crore. The profit fell despite an improvement in volumes, mainly due to higher expenses.
Images are for reference only.Images and contents gathered automatic from google or 3rd party sources.All rights on the images and contents are with their legal original owners.
Aggregated From –
Comments are closed.